Any of you guys run or ever owned a business? Got experiences to share? Knowledge to impart? Advise to dispense?

JoeRedskin

12-09-2011 04:58 PM

Re: Starting a Business

That's a pretty open ended question. Are you starting from ground zero? What kind of business?

KLHJ2

12-09-2011 05:07 PM

Re: Starting a Business

Yes, don't do it unless you are willing to partake in a long period of anguish until it all pays off. It is a lot of work and very time consuming. Everyone wants to be paid off but nobody wants to pay you on time.

Make sure that you have enough start up cash to sustain yourself and operations for a long period of time. If you do not have as much start up cash as you projected as necessary in your business plan and lenders will not give you as much as you need because they are risk adverse; don't start operations. Chances are you will need as much cash or credit as you projected and possibly more.

Partners can be a good thing to alleveate financial burden, but be forwarned, some guys do not have the same vision or ethics as you do. Be prepared to fight many battles if you guys are not on the same page.

I would tell you more, but I am in a rush. I wish you luck.

SirClintonPortis

12-09-2011 05:32 PM

Re: Starting a Business

Never owned, but there's a couple things:

Start learning about tax deductions.

Start getting the basics of accounting down.

IRS has a little checklist: [url=http://www.irs.gov/businesses/small/article/0,,id=98810,00.html]Checklist for Starting a Business[/url]

Oh, and being a little unethical isn't a bad thing if survival is the issue. :FIREdevil:

mlmdub130

12-09-2011 05:42 PM

Re: Starting a Business

[quote=Angry;866610]Yes, don't do it unless you are willing to partake in a long period of anguish until it all pays off. It is a lot of work and very time consuming. Everyone wants to be paid off but nobody wants to pay you on time.

Make sure that you have enough start up cash to sustain yourself and operations for a long period of time. If you do not have as much start up cash as you projected as necessary in your business plan and lenders will not give you as much as you need because they are risk adverse; don't start operations. Chances are you will need as much cash or credit as you projected and possibly more.

[B]Partners can be a good thing to alleveate financial burden, but [U]be forwarned, some guys do not have the same vision or ethics as you do. Be prepared to fight many battles if you guys are not on the same page[/U].[/B]
I would tell you more, but I am in a rush. I wish you luck.[/quote]

all great advise and the bolded part is the best advice you could ever have. i recently left the company i started because my bussiness partners (my best friend and his dad) were completely worthless and unreliable. if you do get partners i would advise against them being anyone you are close to, it can drive you apart very quickly, and in my opinion it's not worth it.

saden1

12-09-2011 05:53 PM

Re: Starting a Business

[quote=JoeRedskin;866608]That's a pretty open ended question. Are you starting from ground zero? What kind of business?[/quote]

I intended it to be an open ended question so people can share whatever they think is appropriate.

I'm in the process of starting a software company with my time and money and if things go well I'm hoping to bring on some venture capitalists.

saden1

12-09-2011 05:54 PM

Re: Starting a Business

[quote=Angry;866610]Yes, don't do it unless you are willing to partake in a long period of anguish until it all pays off. It is a lot of work and very time consuming. Everyone wants to be paid off but nobody wants to pay you on time.

Make sure that you have enough start up cash to sustain yourself and operations for a long period of time. If you do not have as much start up cash as you projected as necessary in your business plan and lenders will not give you as much as you need because they are risk adverse; don't start operations. Chances are you will need as much cash or credit as you projected and possibly more.

Partners can be a good thing to alleveate financial burden, but be forwarned, some guys do not have the same vision or ethics as you do. Be prepared to fight many battles if you guys are not on the same page.

I would tell you more, but I am in a rush. I wish you luck.[/quote]

Great advise.

Bushead

12-09-2011 06:33 PM

Re: Starting a Business

I free-lanced as a web designer and also did some social media before I started an official business partner with someone else. I've been doing it since June and I have come to the realization I don't like it. Ha.

Since we are a web company, we had very low expenses and very low barrier to entry, so we did not have too much hardship starting to pick up clients and getting some kind of cash flow, but i'll tell you, it is very FEAST OR FAMINE. I would go through cycles of all sorts of lengths where I'd be earning more than i'd ever earned before (I'm 23 so the bar is pretty low) and then going forever without ever seeing another dime.

Also, be prepared to wear all the hats in the business. I know everyone reads that and goes of course, but it's easy to start your own business doing something you love to do but really only spend 20% of your time doing it -- the rest of it is sales, networking, accounting/admin, and other stuff. If I counted up my time of what i actually do, I don't spend a lot of time doing what I like. I think that is probably the biggest problem.

And I second the whole warning about Partnership. It is very difficult to be on the same page and cover the right skill sets to make it work long-term. After only working with my partner for 3 or 4 months, we had to have a huge meeting and we weren't sure if we were going to make it through each other's different way of doing things. Things finally worked out, but I don't really like what I'm doing, so I'm getting into the wellness field!

FRPLG

12-10-2011 12:20 AM

Re: Starting a Business

Business relationships are made to be broken. Can't think of one that ever really lasted.

Mattyk

12-10-2011 11:25 AM

Re: Starting a Business

Friends usually don't make good business partners.

Know your competition, and know your market.

Schneed10

12-10-2011 01:29 PM

Re: Starting a Business

[quote=saden1;866617]I intended it to be an open ended question so people can share whatever they think is appropriate.

I'm in the process of starting a software company with my time and money and if things go well I'm hoping to bring on some venture capitalists.[/quote]

Leveraging skills you already have is huge, I know you're a software guy already, so it's wise to stick with a field you know. Sounds like a field that can keep overhead expenses and working capital really low, at least in the startup phase, that's a plus. I imagine all you need is a powerful PC and maybe a server or two?

Try to develop a few software products as far as you can on your own before hiring others or investing further. Venture capitalists will be much more likely to invest if you show them that you've developed a product or two. Hopefully you can even demonstrate that there is a demand for your product first.

You're going to be dealing in intellectual property, so once you've developed a product to the point where it's nearly ready to go to market, consult with an intellectual property attorney about the process for patents, copyrights, and otherwise protecting yourself.

When you get to the point where you need funding in order to take the next step with your business, give careful consideration to the the financing. Venture capitalists will often want an equity investment in your company. They'll give you funds in exchange for a stake in your business. So if they give you say $100,000 in exchange for a 25% stake in your business, that will entitle them to 25% of all future profits. But the plus is that if your company fails you don't owe them a dime - you won't be liable for paying them back.

The other option is straight up debt. Simply secure a loan and pay regular interest. You can often find loans with a 'cash flow window' structured in such a way that you make only interest payments for a given period of time before having to pay down the principal. You can deduct interest payments against your business's taxes, so you'll reduce your tax liability which gives you cash flow relief while you're in the startup phase.

Taking on a loan has the advantage of allowing you to retain 100% ownership in your business, giving you the right to 100% of the profits. The con is that if your business fails, you'll need to pay back the debt. You'll be liable for doing so, which can thrust you into bankruptcy. There's obviously risk there, but the reward is greater as you retain the rights to 100% of cash flows & profits.

But that brings me to my next point, you can minimize your personal risk by incorporating. Once you've got a product to the point of development and you're ready to consider financing options to fuel growth and you're ready to consider intellectual property lawyers, then it may be wise to talk to said lawyer about incorporating. Incorporating allows you to avoid personal liability in the event your business fails. Debtors will not be able to place liens on any of your personal assets, incorporating essentially builds an unbreakable wall between your business assets and your personal assets. If your business fails when incorporated, your debtors can only place liens against your business assets. If your business fails under a 'sole proprietorship' model (where you simply own the business privately, sans incorporation), they can come after your personal assets.

Good luck saden. Hit me up if you want to discuss anything further, I'll be glad to lend whatever help I can.

Schneed10

12-10-2011 01:35 PM

Re: Starting a Business

Forgot to mention, part of my job entails strategic market analysis. I administrate our market and demographic databases. Its of course centered around healthcare and the Philadelphia market because obviously that's where we're located, but if you think you need any demographic data for markets you're considering targeting, I can probably work something out quietly and get it to you.

I'd imagine software is something you'd peddle to other software firms, or peddle electronically via the internet. So demographic information on a particular region or target market may not be relevant to your business model. But if you think you'd have a use for it and want to talk more, feel free to PM.

Dirtbag59

12-10-2011 09:07 PM

Re: Starting a Business

A family member of mine started up a tech business in the late 90's that wasn't a dotcom after having a well paying job at one of the major hardware companies. Apparently he's still feeling the effects of it a decade later and it caused a lot of strain on his marriage. I'd say go for it so long as your single and don't have any kids.